Can Detroit lead the green mobility revolution? | Opinion

Over the past two years, businesses along with state and regional policymakers have become familiar with a veritable alphabet soup of federal programs. If not for the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Coronavirus Relief & Response Supplemental Appropriation (CRSSA) and the American Rescue Plan (ARP), American businesses and state and local governments would be buried under an avalanche of deficits and layoffs.

As 2021 draws to a close and the pandemic continues, this spate of federal funding has moved into its next phase — rebuilding. If Michigan plays its cards right, it can unscramble the alphabet soup and rearrange the letters into the script for a completely transformed economic future that builds off its historic and current strengths in advanced manufacturing and mobility. Detroit put the world on wheels and revolutionized transportation more than 100 years ago, and now is our chance to reboot the revolution and keep the world moving; but this time without the carbon.

This goal is ambitious, yet absolutely necessary and completely achievable. In fact, it WILL happen, the only question is where? When we look back on the 21st century, will we regret seeing the era when Detroit ceded its place as the center of the world’s mobility to California, Arizona, Texas or China, or will we celebrate the time when we leveraged our existing advantages and head start to leapfrog the competition and simultaneously save the planet?

Rising temperatures have caused devastating weather patterns across the globe at an increasing frequency. In 2021, Germany, India and China experienced the worst flooding in generations killing thousands of people, while Africa, South America and parts of Asia suffered from extreme drought, putting millions at risk of starvation.

And we’re not immune here at home. Just this summer, the American west smoldered and burned in a record heat wave that caused wildfires and droughts.  Meanwhile, our portion of the country waded through historic flooding that swamped the New York City subways and tens of thousands of basements in metro Detroit.

As a result, the world has finally woken up to the necessity to reduce our carbon footprint and slow the impact on our planet. In the U.S., transportation (cars, trucks, airplanes) represents nearly a third of total greenhouse gas emissions; the largest source by sector. The Biden administration recently announced a goal for more than half of all cars sold in the US to be electric — i.e., with zero tailpipe emissions — by 2030. Other parts of the world have made more ambitious plans. That means that in the next decade, automakers will build and sell hundreds of millions of electric vehicles.

Surely that means that Detroit, with its massive head start in facilities and research and development, will be the center of the electric vehicle future, right? Not necessarily. For starters, the Big Three represented just a fraction of the 3.1 million global EV sales in 2020. Admittedly, they were late to the game, and their first real mass-market products are just hitting dealerships. But even when the Big Three’s EV market share increases, as it surely will, there is the very real question as to where they will build them. Will they retrofit existing plants for the different, more flexible requirements of EV manufacturing, or will they choose greenfield sites to build off of a clean slate? A big part of that decision will hinge on where the battery cells, modules and packs are produced and assembled. 

This is a massive risk for Michigan. While the supply chain for internal combustion vehicles concentrated in the upper Midwest to be near Detroit for most of the 20th century before beginning to expand to the southeast and Mexican border, the EV supply chain is nascent. Michigan has some existing capacity, and Ford and General Motors both announced plans to build batteries in Michigan and northeast Ohio, but the vast majority of batteries used in EVs are currently made overseas.  And recent announcements by Ford to build mega plants in Kentucky and Tennessee should be wake-up calls for the state.

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As the Big Three catch up and invest the tens of billions of dollars they have committed over the next decade, Michigan’s fate hangs in the balance. If those investments are made here, we’ll retain our place atop the world’s mobility leaderboard. If not … you know the rest of the story.

Fortunately, at this critical point in our economic journey, we’re not left sitting on the sidelines as spectators. The alphabet soup of federal programs came at exactly the right time. The enactment of the American Rescue Plan along with the likely passage of bipartisan innovation and infrastructure bills and a broader, still-to-be-determined, reconciliation bill means unprecedented levels of federal investments will flow toward economic restructuring, climate solutions and inclusive entrepreneurship and workforce development.

While the federal government invests, it is up to Detroit and Michigan to design and deliver transformative investments and initiatives.

To achieve this, the following three moves are urgent:

First, the city, metro and state (public as well as private and civic leaders) need to organize for success. The federal government investments will flow through literally hundreds of programs across dozens of agencies.  A process that just adds up the wish lists of credible yet disparate organizations will lead to results that fall short of the mark. The whole will be less than the sum of the parts. On the other hand, a coordinated strategy to expand our competitiveness in advanced manufacturing and mobility, restore our core city as a globally significant innovation hub, enhance equitable access to opportunities and replace industrial-age infrastructure with sustainable and resilient systems will reposition the region for the next century. Cities like Dayton and Louisville are already establishing Stimulus Command Centers to align federal sources with local priorities, track progress around securing a broad array of federal funds, and monitor the timely and effective execution of projects. It’s imperative that Detroit align its efforts to access these resources with a singular focus. We should plant our flag in the ground and announce that the future of world mobility — one that doesn’t destroy the planet — is going to be built here, and we should concentrate our efforts at accessing federal resources to support this vision.

Second, certain federal programs deserve immediate attention as part of this overall strategy, given their relevance to Detroit’s economic future. Detroit needs to start preparing plans NOW to compete for federal investments in tech hubs, R&D commercialization and EV charging stations. Companies and community colleges should start planning NOW to equip workers with the skills they need for the new jobs of the clean economy. Financial institutions, entrepreneurial support groups, public authorities and investors should come together NOW to pioneer new funds and products, quality capital and business coaching, particularly around the start and scaling of Black- and Brown-owned businesses. The Detroit Regional Partnership (DRP) has quarterbacked an effort to submit a response to the Economic Development Administration’s $1 billion Build Back Better Regional Challenge that is a great step forward toward this vision. We must coordinate our plans for the State Small Business Credit Initiative and the Good Jobs Challenge to complement this effort.

Finally, Detroit and Michigan should consider establishing a special purpose, multi-sector intermediary with the capital, capacity and community standing to lead the climate transition. Helsinki’s 5-year Smart and Clean Foundation provides one example of how public, private and civic leaders can get behind one organization to identify the multiple efforts that must be undertaken to secure the green future as well as tease out the disparate responsibilities of different sectors. Perhaps this is the DRP or the Michigan Economic Development Agency’s Office of Future Mobility and Electrification, but it must be a group that wakes up every morning committed to the vision. In the absence of such an entity, we run the risk of failing to maximize the opportunity of these separate, but directly related investments.  

The decarbonization of the auto industry is one of the most profound industrial transformations in the history of the world. Detroit and Michigan need to rise to the occasion and lead this transition with ambition, focus and discipline. If we do, we will secure a positive economic future for decades to come.

Ned Staebler is president and CEO of TechTown Detroit and vice president for economic development at Wayne State University. Bruce Katz is founding director of the Nowak Metro Finance Lab at Drexel University and serves as an advisor to Bedrock Detroit.